China’s investment demand jumped 123 percent to 90.9 tons in the first three months, compared with an 8 percent rise to 85.6 tons for India, the council said. Bullion jumped to a record $1,577.57 an ounce this month as investors sought a store of value amid rising inflation and concerns about the strength of the global recovery.

“Gold has taken on a new role in China amid concern about inflation,” Song Qing, a director at Lion Fund Management Co., said by phone from Shanghai. “It is increasingly being seen as an asset allocation choice. Just imagine the total wealth in China and even a small percentage of that choosing to buy gold. This demand is going to be enormous.”

The culture’s deep-rooted preference for the precious metal, the impending inflationary fears in emerging markets, and limited domestic investment channels will all drive further growth in the Chinese gold demand, the council said in a report. Demand for gold jewelry gained 21 percent in the first quarter from a year ago to a record 142.9 tons.